The Bourse Weekly Performance (Week-ended04thof
July 2014)
Week-ended 04th July 2014
|
Week-ended 27thJune 2014
|
|
All Share Price Index
|
6,477.51
|
6,363.49
|
S&P SL20 Index
|
3,610.68
|
3,521.30
|
Total Turnover for the week (LKR)
|
11,492,509,528
|
4,111,328,178
|
Total Net Foreign Inflow/ (Outflow) (LKR)
|
3,028,495,430
|
383,947,353
|
Market Capitalization
|
2,714,513,087,185
|
2,666,683,309,228
|
Market PER
|
17.45
|
17.15
|
Market PBV
|
2.07
|
2.03
|
The
Colombo bourse ended the first half of 2014 on an encouraging note, up 8.43% on
an YTD basis with sentiment boosted by low interest rates, improved liquidity
and the expectation of improved corporate EPS growth. The main index exceeded
6,450 levels whilst recording excellent levels of daily turnovers with weekly
average turnover surpassing LKR 2 Bn. TheAll Share Price Index gained 114.02 points
(1.79%) over the week to close at 6,477.51 while the secondary S&P SL 20
index gained 89.38 points (2.54%) to close at 3,610.68 points. The total market
capitalization appreciated by LKR 47.8Bn to close the week at LKR 2.71 Tn. The foriegninvestor
sentiment was very bullish during this week as well, with the total foreign
buying of LKR 4.9Bn, outpacing total selling of LKR 1.9Bn. Hence the week
observed a net foreign inflow of LKR 3.03Bn. With this the YTD net foreign
inflow to the market climbed to LKR 9.34Bn.
A
total of 652.74Mnshares were seen changing hands to record a total weekly
turnover of LKR 11.5Bnwhich is 2.8 timesexpansion over its previous week’s
figure. The off market deals took place on the stocks of DIST, JKH, SUN, AEL, CARG,
CIC, HNB, HHL, LLUB, ASIR, BIL,CIC,GLAS,AHUNand DIMO.The week’s ASPI movement
was heavily influenced by the stocks of CTC, COMB and JKH. The market PER increased
to 17.45x by end of this week whereas the most stagnated PBV jumped to 2.07x.
While
we are definitely motivated by the robust performance of
the market, with the 1Q2015/2Q2014 corporate results in the offing, we believe
that it may be highly important to determine the source of profits, whether a
result of actual top line growth or an increase in other income or a
significant cut in costs (that may have a negative impact on future
productivity). While the equity market has a notorious tendency to rush from
one side to another in response to the ebb and flow of optimism or pessimism,
we recommend investors to make a directional call, build a quality portfolio of
stocks that will generate consistent returns in the medium to longer term.
